First time buyers often rent as it takes so long to find a home to buy in the US

First time buyers in the US consider renting while they find their dream home as it can take so long to get on the housing ladder, new research suggests.

The housing market is currently so competitive that it takes more than 17 weeks to find a new home to buy but data from real estate firm Zillow shows it can also take a long time to find a home to rent, more than 10 weeks.

The research also found that more than half, 54%, of buyers do not get the first home on which they make an offer. First time buyers make up 47% of all buyers, so it’s feasible for many potential buyers to keep their options open and return to renting if they aren’t successful purchasing a home.

‘The line between renting and buying is blurry, and that’s a sign of the times. It’s difficult and time consuming to find a home to move to, especially in competitive housing markets,’ said Zillow chief marketing officer Jeremy Wacksman.

‘With first time buyers competing for a limited number of homes on the market, savvy shoppers have a plan B, hoping to buy if it works out, but willing to sign a lease for a home if they don’t make a deal by the time they need to move,’ he added.

Among those who bought a home in the last 12 months some 66% of millennials considered renting as well, 54% of generation X buyers considered renting, and 32% baby boomer buyers.

Younger renters are also more flexible when looking for a home to rent. Some 63% of millennials and 59% of generation X renters considered buying while looking for a rental. Among renters over 50, most did not consider buying at all.

Renters make up a larger group of the US population than at any time in the last 50 years. Last week the US Census Bureau reported the home ownership rate rose very slightly to 63.5% in the third quarter of 2016, barely edging up from a 51 year low.

For many renters, buying is not a financial option. The median income of home buyers is $87,500 a year, while renters make, on average, $37,500. Low income renters looking for a new home in a tight rental market can expect to spend an average of 12.1 weeks looking for a home, according to Zillow’s analysis of survey responses and rental markets.